SEBI eases compliance norms for FPIs investing in Government Securities

Current Context: On June 18, 2025, SEBI approved key relaxations for Foreign Portfolio Investors (FPIs) investing exclusively in Government Securities (G-Secs) to enhance ease of doing business and attract long-term debt inflows.

Key changes include:

• Less frequent KYC reviews, now aligned with RBI norms.
• No need to disclose investor group details for G-Sec FPIs under the Fully Accessible Route (FAR).
• NRIs, OCIs, and Resident Indians can now be constituents of G-Sec FPIs without restrictions applicable to other FPI categories.
• Extended timeline of 30 days to report material changes (up from 7 days).

These reforms come as FPI investments in FAR-eligible G-Secs crossed ₹3 lakh crore in March 2025, following India’s inclusion in global bond indices.

Question:

Q.1 Under the new SEBI guidelines, what is the revised timeline for Government Securities (G-Secs) Foreign Portfolio Investors (FPIs) to report material changes?
a) 7 days
b) 10 days
c) 15 days
d) 30 days

Answer: d) The timeline for reporting material changes by FPIs has been extended from 7 days to 30 days, allowing more flexibility.